Letting of House to sister concern's em'ee

This query is : Resolved

Shefali Bajpai (Querist)
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28 December 2008 A Ltd. firm had let out the house property owned by it to the employees of its sister concern, B Ltd. Under what head of income should the income from the house property of income from the house property of A Ltd., occupied by the employees of its sister concern B Ltd., be assessed? Can A ltd., claim that such income is not chargeable under the head “Income from House Property”, on the ground that the property has been occupied for the purpose of its business or profession?

C A GROUP COACHING

C A GROUP COACHING (Expert)
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28 December 2008 PROPERTY OWNER IS A LTD. & GIVEN TO EMPLOYEES OF B LTD.
IN MY OPIION IT WILL BE ONLY & ONLY INCOME FROM H/P FOR A LTD

CHANDRAKANT AMBANI
BOMBAY
9819408963
9821240674

K V Subba Rao

K V Subba Rao (Expert)
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28 December 2008 Visit http://www.taxmann.com/DitTaxmann/IncomeTaxActs/2005ITAct/casesec22.htm

to note the following:
"...income from property let out to the employees of the sister concern by the assessee cannot be assessed as income from business and depreciation allowed on such properties, but instead should be treated as income from property under section 22 - CIT v. T.V. Sundaram Iyengar & Sons Ltd. [2004] 271 ITR 79 (Mad.)."